Taxes owed on $24B in Recovery Act work

Contractors, grant recipients fingered by GAO

A new Government Accountability Office report has found that at least 3,700 recipients of grants and contracts founded by economic stimulus law dollars have unpaid federal taxes totaling $750 million.

GAO did a deep dive into 15 recipients and ended up referring all of them to the Internal Revenue Service for further investigation.

There are nearly 80,000 recipients of contracts and grants funded by the American Recovery and Reinvestment Act.

GAO compared quarterly reports required under the Recovery Act with IRS data to determine the amount of back taxes owed. There is no prohibition against a contractor receiving federal contract funds even if it owes federal taxes, according to GAO.

The 3,700 recipients identified by GAO received about $24 million in Recovery Act funds.

Of the 15 recipients that GAO conducted a detailed audit of, they owned back taxes ranging from $400,000 to $9 million.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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